Changes and decisions facing beneficiaries

November 6, 2006

Very few drug plan providers left the Medicare market in 2007, but their offerings have shifted. There are fewer plans offering basic coverage and more offering enhanced coverage. Beneficiaries in most states have 50-60 prescription drug plans to consider including 15 or 16 that offer partial or complete coverage in the donut hole.

The annual open enrollment period from Nov. 15 through Dec. 31 introduces a new feature to Medicare and sets Part D coverage apart from Parts A and B. If a beneficiary takes no action, his or her Part D benefit will continue. However, many beneficiaries may find both stand-alone and Medicare Advantage plan options that cost less.

Many seniors are weary of Medicare choices and daunted by the prospect, especially the sickest who could benefit from choosing carefully. They may not be aware that there are plans with a higher monthly premium but with coverage that better meets their needs. Medicare Advantage plans are another alternative that could provide both health and drug benefits at a premium that is lower than separate purchases for Parts A, B, and D.

Eight in 10 beneficiaries surveyed in July 2006 did not know that they could sign up for a plan that covered the gap. Moreover, two out of three of those surveyed weren't aware that special assistance is available for those with low incomes, including one out of three seniors who would qualify for that assistance.

The Social Security Administration will be mailing information about the subsidy and asking beneficiaries whether their circumstances have changed over the past year. Advocates are planning outreach programs to encourage those eligible to register for the low-income extra help. Each enrollee will be notified by his or her plan about whether there is to be any change in the premium, the formulary, or the tiers for drugs that are covered for 2007. The 2007 version of the Medicare & You handbook will explain Medicare coverage in detail and highlight preventive services available to beneficiaries.

CMS redesigned the Prescription Drug Plan Finder at http://www.medicare.gov/ to ease the selection process. There are changes in the layout and design and fewer steps needed to make plan comparisons. The Plan Finder will show a beneficiary's low-income supplement as well as his or her drug list and pharmacy selection. A graph will display the enrollee's cost share month-by-month for a given plan according to the coverage levels. Complaint information about drug plans is also available.

The Medicare Personal Plan Finder (MPPF), which assists in the selection of a Medicare Advantage plan, also changed in layout and design. It now offers personalized searches and better integration with the Prescription Drug Plan Finder for comparisons with prescription drug plans.

Beneficiaries can make enrollment requests directly to the plan over the telephone and through their Internet sites, or use paper enrollment forms. Alternatively, beneficiaries may enroll through 1-(800) MEDICARE or via the Medicare Web site, and CMS will forward the information to the plan.

Medicare beneficiaries should be aware that the Medicare Modernization Act provided for yearly updates to the standard Part D benefit, including the standard deductible, initial coverage limit, and catastrophic coverage threshold. Two indexing methods affect the update, the annual percentage increase in average expenditures for Part D drugs per eligible beneficiary and the annual percentage increase in the Consumer Price Index.